What to do if a business fails

Essay by olefersCollege, UndergraduateA, May 2007

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According to the Small Business Administration, new businesses have a 34 percent chance of failing within two years and half are not operating in four years. 60 percent of businesses fail in six years (Scarborough and Zimmerer 12). I know people do not set out to fail this statistics show that it does happen.

What is business failure? John Watson and Jim E. Everett authors of "Do Small Businesses Have High Failure Rates", say that experts tend not to agree what is the clear definition of business failure. Most of society believes that it is when a business files for a form of bankruptcy. However others believe that it can be "bankruptcy, merger, or acquisition. Still others argue that failure occurs when a firm does not meet responsibilities to stakeholders of the organization."The South Dakota State University Bulletin states students in the Entrepreneurial minor will "have the opportunity to increase their knowledge of skills needed to start, own, and/or operate a business."

Part of owning a business is the chance of failure. In the syllabus for Entrepreneurship II one of the course objectives is to learn the challenges and rewards of entrepreneurship (Behrend). The class Entrepreneurship II needs to discuss what to do if a business fails because if a business does fail students need to know how to deal with the failure.

Being prepared for failure is a practical part of starting a business. The statistics stated earlier show that business failure is very possible, and it is hard to see why learning to deal with business failure is not discussed in the Entrepreneurship II class. If the South Dakota State University wants students to be prepared for the real world, learning about business failure would be a big step. Also if we understood business failure students could learn...